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to Hongkong to act as liaison between the Inspector-
General and the Hongkong superintendent of Customs and
Excise, and the grant to them of a definite position in
the Hongkong table of precedence. He expressed the opin-
ion that this soheme offered a promising basis of nego-
tiation. I shortly afterwards received from Mr.kaze a
copy of Sir William Peèl's letter to him regarding tax-
collection by Chinese Customs officers, and of his reply,
stating that he found the so-called "Lloyd" scheme inadə-
quete and unsatisfactory, and putting forward as an amen d
ment to that scheme a modified procedure on the above
lines, which in his opinion fully provided for the pres-
tige and authority of Hongkong, while alse satisfying
Chinese susceptibilities.
on September 6th, Sir William
Peel repeated to me his telegram to the Colonial uffice
Number 109 stating that he considered Mr. Baze's modified
proposals for cooperation were not unsatisfactory and
should lead to an agreement, and that he would have a
fresh agreement prepared on these lines and submitted to
His Majesty's Government, but that he thought it might be
best/
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